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Suppose the economy is producing at the natural rate of output. Assuming a fixed natural rate
of output and everything else held constant, the development of a new, more productive
technology will cause ____ in the unemployment rate in the short run and ____ in the
inflation rate in the short run.
A) an increase; an increase
B) a decrease; a decrease
C) a decrease; an increase
D) no change; no change
Answer: B
Diff: 2 Type: MC Page Ref: 584
Skill: Recall
Objective List: 24.3 Differentiate between short-run and long-run equilibria in the context of the
aggregate demand and supply framework
Suppose the economy is producing at the natural rate of output. Assuming a fixed natural rate
of output and everything else held constant, the development of a new, more productive
technology will cause ____ in the unemployment rate in the long run and ____ in the
inflation rate in the short run.
A) an increase; an increase
B) a decrease; a decrease
C) no change; a decrease
D) no change; no change
Answer: C
Diff: 2 Type: MC Page Ref: 584
Skill: Recall
Objective List: 24.3 Differentiate between short-run and long-run equilibria in the context of the
aggregate demand and supply framework
Suppose the economy is producing at the natural rate of output. Assuming a fixed natural rate
of output and everything else held constant, the development of a new, more productive
technology will cause ____ in the unemployment rate and ____ in the aggregate price
level in the long run.
A) an increase; an increase
B) a decrease; a decrease
C) a decrease; an increase
D) no change; no change
Answer: D
Diff: 2 Type: MC Page Ref: 584
Skill: Recall
Objective List: 24.3 Differentiate between short-run and long-run equilibria in the context of the
aggregate demand and supply framework